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The rise of the worker co-op is definitely something to watch! I'm currently exploring a worker co-op for a tech start up. Biggest problem? Funding. No investors want to touch a co-op.
Because they can't take ALL the profits then. Bunch of greedy mofos.
It's a matter of scale. For co-op where we are, you can get "investor loans" but they tend to have a fixed return. Capital wants to gamble more than they want a 5% APR for 10 years.
Maybe credit unions could be an option to explore?
What we're currently exploring is an angel loan from someone sympathetic that has historically lived higher up the corporate ladder and we're applying for some government grants, but Credit Union may be a good idea!
I've thought about this a bit (but by no means extensively) and I feel like the stakes are different for tech companies because growth doesn't require as much capital as a non-tech business.
For a SaaS tech company to scale from 10 users to 1000 users doesn't mean a bunch more sales people and a new factory, it means having a great product and turning on new servers, likely only incurring a higher hosting bill from AWS (or similar).
In that sense, I feel like it's easier for the sentiment to be "we'll be better off with 1000 more users" over and over again until people start to want to optimize the business. Which means doing more traditional "shareholder value creation" that big companies do today.
Don't get me wrong, I would love to see it happen, but i think tech just scales so differently and easier than other business types.
I think this is a common misconception based on survivorship bias and the high cost to entry. Taking your hypothesis as true: you have to have a product that can be sold to ten users as easily as 1000 users (this in and of itself is not a given). That's where the cost is: the starting up of the business where you have no customers and won't have any for several years.
Here's where it gets rough. The biggest problem isn't "funding." It's people working solely for money and nothing else.
If you really care about X, then you should be willing to put in the work even if it doesn't give you the most money in return.
As long as, at all levels of society, people prioritize wealth over results, these problems will not get solved.
That's nice and all, but only works for people that already have money. Food isn't free. Housing isn't free. Heck, water isn't free
EDIT: want to go through the maths to extrapolate this privilege.
Let's say you need one small team to deliver a novel product, say 5 people. Let's assume they all live in Europe and just need enough to survive - say, 20,000 euros a year. A lot of ground work has been done, so it'll only take two years to go from concept to R&D to something to show a potential buyer.
So you have about 100,000 euro per year cost to just keep everyone fed, housed, and clothed not including any equipment, software, licensing etc costs. Assuming there are no costs but just keeping everyone fed and alive the co-op needs 200,000 euros in the bank or alternative funding to get the product in a sellable (note: not finished) state.
In project management in tech (my background) a good rule of thumb is staff cost = 1/3 of costs. However, let's say we're being super lean and can self-source the more expensive equipment and just have to think about licenses for core software so let's make that number 1/2 of cost.
So for the two years of operation to get the product into a position where it can be taken to potential customers, the business would need approx 400,000 euros before a product hits a shelf.
And that's why funding is a problem.